Help me with industry sign banking hawaii forbearance agreement
I'm Tanya Ahina with century 21 I
property Hawaii. My guest today is Rose Kirland of Aries Mortgage, she is a Senior
Loan officer and today she joins us to talk about Forbearance Loans. Hi Tanya and everyone out there in the world I'm Rose Kirland. I have
been in the mortgage business world for 41 years I started back in 1979. I
worked for many companies because in the mortgage world, companies sometimes sell and get taken over, So at one time I was the Vice President for PNC Financial
for the Kissel Company and then over the years I've been doing mortgages for many families, thousands of families. I am a mother of four sons and I say four
because my grandkid really thinks he's one of my kids so I said no you're my
grandson. I am one of 14 other brothers and sisters. We have a really big
family. I love the mortgage business because it's about helping families and
helping people get started with a plan to one day own their own home. I'm so
happy to be here today and answer all your questions. Ok, so what is a Forbearance Loan? Okay, basically you are given a deferment so let's say because
of situations that are happening right now financially you're unable to make
your mortgage payments. Let's say starting May. So, you can request from
your lender and it's totally up to the lender but you can request from your
lender that you would like to have your loan mortgage payments forbeared or
deferred so forbearance means that for the next six months you don't have to
make a single mortgage payment now that does not mean that the mortgage
payment goes away it just means that you're given a release of that tension
and that stress so that you can reorganize your financial matters and
then be ready to pay it back at the end of the forbearance term what we need to
be very careful of is that forbearance as Tanya had mentioned earlier does not
mean forgiveness. It does not mean you do not have to pay back it just means that
your payments are delayed there will be no late charges no penalties during that
period of forbearance but you do have to pay it back when the forbearance is due
so let's say as an example you start off May 1 and you don't make any payments
for the next six months on the seventh month what happens all those six months
that you did not pay or do on that seventh month plus the seventh month so
it's a big chunk of change and you really need to have a plan of action to
do that I had a client a customer who needed to do forbearance and they
clocked it so that they would not be in a desperate situation where they list
their property and the agent wouldn't have to list distress sale they did not
want that because it possibly might indicate to buyers out there that you
can lowball the offer or something that's really valued at what it was
listed at so they requested a forbearance and the listing was taken
and a property was sold and closed within the three months their credit was
not effected because there were no late payments
charge nothing was reported to the credit bureau once the forbearance was
approved and they have the funds to pay off what they would do on the deferment
now that's a plan of action I'm sure many of us in owning our home if we
would like to consider forbearance does not want to have to resort to selling
our home necessarily but that's an example of a plan of action to find a
way to pay back the six months plus the month that is doin's
well we have seen the pros and the cons of doing forbearance so when you are
considering that the first thing you should look at is how many months down
the road do you think you're going to run into payment trouble so for example
today you might be able to make the payment and maybe you might be able to
make the payment but possibly June July August you're not able to because you're
either waiting for your unemployment check or your tax return refunds your
stimulus check so what you want to do is apply for the forbearance ahead of time
because lenders are not magicians that overnight say voila you have the
forbearance. It could take a lender as much as 30 to 60 days to approve the
forbearance and that's where we have the mistake that you suddenly are being
charged a late fee because you're not making your payment while you're waiting
for the forbearance approval so you need to be careful about that strategize and
right now when you look at your world of finances you can tell right away if
you're going to run into trouble you can tell you're going to run into trouble if
you cannot make your spectrum or online internet
payment that you're going to run into trouble. So prepare, be aware of that have
look at them down the road and make your application to your lender right away
now the problem with the end result is that the good news is that if you can
pay it that's wonderful but if you can't pay it before the forbearance is do you
need to talk to your lender about possibly doing a modification and modify
your loan which is another nice way of saying refinance with a whole without a
whole bunch of fees modify your loan during the forbearance period so that
when it comes do your modification would have been approved and you go into a new
loan without having the stress that if I couldn't handle $1,000 six months ago
every month how am I going to handle $7000 six months later and that's
another strategy that I've advised to people and you really have to stay on
the lender now what's unusual about this time the pandemic is that lenders are
more willing to help you with forbearance and to help you with
modification if not for the pandemic you probably would have to go late on your
mortgage payments before they would believe that you're struggling but
because of the pandemic they might see that you were working and now you're
making less but you still have the same high debt that was keep that you were
capable of paying when you were making more people are thinking oh this is my
solution there's my solution and really if you are having trouble before is this
something that's really gonna help you or could put you could set you back even
further and make things even more complicated
maybe adjust that yes barbarians is not the cure arm and it's when people even
when people come to ask me should I refinance just because the interest
rates are three and a half percent does not mean you should refund minutes you
know you might be finishing off your mortgage at four and a quarter interest
rate but you might only have fifteen years left you're in a way better
position than trying to refinance at three in the quarter and starting all
over again on a 30-year mortgage so when you are looking and thinking about
redoing your mortgage or deferring it or taking on forbearance
or a modification you have to look at everything that's unique to you because
every individual every household has a different circumstance forbearance is
not for everyone it you could lose your home if you don't make those payments
you could lose your home in three to four months after the forbearance was
due because you didn't pay all that back Daymond us more are adding up so you
really need to consider those factors some of the other ways is check with
your realtor there might be a special program that the county is opened up for
people regarding credits or things like that and some people have actually gone
to the distance of listing their home and downsizing to a smaller home or
possibly listing their home and looking at regrouping and then buying again
because you just don't want to have that shelter done all over you I mean that's
just one of many ways if you have a financial advisor sometimes they'll
advise you other things that involve legal action such as bankruptcy or
things like that but really everyone wants to try to remain
stay in their home and believe me lenders do not want to take your home
away so we try everything we can to work with you or at least are supposed to in
the servicing department work with you to try to help you stay in your home and
keep your home it was rounded back in 2009 for modifications where lenders
were required to give key Boyd chance and that's what's happening today to the
pandemic has caused a rift in our way of life has had dramatic drastic changes
that we've had to adjust to and one of the biggest challenges and things that
we suffer and struggle with is always the dollar because things cost money and
people have considered downsizing by selling off their cars or trying to sell
things that they don't need anymore to get rid of some other death there are
other avenues that sometimes Realtors have found that your home is possibly
capable of having rental income to help you offset your payment's or maybe I've
seen a customer just last month sell their home because they were having
these issues and did not want to look at forbearance and the realtor found them a
home that had a smaller the unit that they could rent out I was attached to
the garage for extra income to help them make the mortgage payment there are much
more comfortable everything my dear friends everything is about cash flow
and so to try to keep that cash flow manageable but going back to forbearance
it's a vehicle that's available to you but it's your responsibility it's on you
to be able to pay it back when it comes due someone say that some companies and
mortgage companies or lenders will roll whole thing out over a 12-month period
so you don't pay it have to pay it back in six months seventh month period is
that correct it could be for some lenders not all lenders are the same so
you could have a lender that's very flexible and looking at your situation
and panning it out will say okay we'll give you a forbearance for six months
but it doesn't look like as your income grows and becomes better that you'll be
able to pay that lump sum so we will adjust the seventh month through the
next twelve months a little bit of each month that you were four Baird so for
example the forbearance might be a thousand a month so that's six thousand
dollars your payment is a regular thousand dollars a month and I use just
a thousand for a zero of easy visualization so in the seventh month
instead of paying the whole seven thousand the lender would be by the six
thousand among the next twelve months which would mean five hundred dollars
per s each month six thousand into twelve months is by about five hundred
so your new payment would go up slightly as far as the lenders concern it may not
be slightly to you but it will go up to fifteen hundred to help repay the five
hundred each month that you were forbearance on for the next twelve
months and then after that you go back to your regular payment now that has
worked really well but you really need to have that exit strategy cleared and
upfront with the lender before they come down with the hatchet problem with
servicing is you never know who you're going to be speaking to if any day at
the surface same Department and you can have a really lovely servicing person
like Tonya or you could have a growling troll
and you just don't want to chance that so if you have a lovely service or like
Tanya who is sympathetic but yet has to fulfill her role as a lender shall work
with you and calculate ahead of time nobody wants disasters nobody wants to
know the future will be lit glim so I would suggest highly that while you're
doing the relief strategy which is forbearance also work with your lender
on the exit strategy so that you're not caught off guard but that is a way that
they say what you in saying rolling it out or rolling it make this clear that
if they're gonna consider for parents they got to make sure that when they're
talking when they're talking to their lender first off talk to someone that
you can talk to and communicate effectively and properly and really help
you rather than just give you a product that you don't know what to do with so
choosing wisely the person you work with upfront making sure that okay you know
what you're getting into but then how are you gonna get out of it successfully
can this hurt someone's credit does it hurt someone's credit it can and can and
may not number one it can hurt your credit if you're already delinquent and
going through forbearance now the forbearance part is not going to hurt
your credit but going through it and being late is what hurts your credit so
the period of time that you're in forbearance it does not hurt your credit
however when you find the need to apply somewhere and they see on the credit
report zero payments for that month they will be concerned a creditor will be
concerned and in that light it may hurt you and your credit depending if you're
trying to seek additional credit while you were in the you know in forbearance
so that's a if and no type of thing but we would
strongly encourage that if that is your last resort then really plan well
getting out how do I get out and if selling your home is an option from the
beginning hey there you have your exit strategy work with Tanja and set things
up if it isn't if you want to stay in your home you really need to either have
some source of income that's going to come to you or a windfall give horse of
money that falls in your lap or work with the lender what other options would
someone have besides this well I always wanted a rich fairy grab grandmother but
that would be like I'm not really good at growing vegetables and selling at the
farmers market that would be my second best option the thing that's hard is you
know a lot of times even the epidemic adds to our situation a lot of times
we're in a bad situation to begin with you know and that's a reality sometimes
we're already in a bad situation where there no matter what the reason was but
we're there and now the pediment comes we even in a
worse situation now what happens and so I think that there the relief you know
that story about the dike where they put the finger in the water to stop the dam
from bursting that's really awful Barrens is and you can't hold that dam
of water very long it's going to come and bite you this is a time where you
really have to do a reality check and I have advised many many people over the
years over 41 years nothing's more important than your health and your
well-being because you can oh recover if you want to if it comes to
that where that's your last resort selling is an option if you own your
home and if that's the last resort and usually that comes because someone has
already been in a bad case for a while and the forbearance is just giving them
more opportunity to have a better chance at having the listing sold better than
being sold as a desperate seller the other option is take on the forbearance
when you're working with your service with the lender if they call them the
servicer take on the forbearance if you find that they will give you a payment
plan to repay that works for you don't say yah yah yah yah yah and then it
doesn't work for you and you're back in there again and then the other route is
work on the forbearance plan and work on your modification the modifications are
a good thing and as I was saying in the panic years of 2008 through 2014 people
were getting modifications at the first two years was 1% the second year was 2%
the third year was 3% that's how many of them saved their homes are those
available now yes they are but there's not that many people are in that much
trouble right now except now it's a different story because of the pandemic
forbearance is a venue exit is an excellent strategy modification and do
not be afraid that if it is your very very last resort letting go selling
regrouping regaining your life nothing's more important than your life and your
health and then coming back again and that has happened with many people that
incidentally has happened with people who claim bankruptcy when you claim
bankruptcy you can't do much for seven years seven
years later they're back owning one home to own three homes in Seoul there are
ways for you to come back you don't have to knock yourself out
I want to consider especially during this time which is an exception lenders
have waived their late fees so typically on a typical average mortgage not one of
those outreach mortgages that were from the days of 1995 of 16 percent interest
rate and didn't have to make income as long as you paid it today lenders across
the nation are not charging you late fees even if you don't pay your mortgage
payment by the first or within the 15 grace period so if you paid your
mortgage payment on April 30 you will not be a sessile a charge and it will
not be record reported to the credit bureau and that's only because of :
pandemic how much longer that lender the lenders will continue to allow that
grace were not certain it could be five months after the quarantine is lifted it
could be immediate but for now to help you adjust readjust and adapt to your
new financial flow of income and outflow of death your mortgage lenders are not
supposed to be charging you late fees or penalties so you may want to check with
your lender hey friendly lender I'm not able to make my payment by the grace
period of the 15 will you be charging me a late fee or reporting it to the credit
bar first line bank Bank of Hawaii I know for sure are not charging late fees
good information ISA gets people thinking you know hey both the horses on
the forbearance don't just run out and go get it people have questions how
would they we choose you can always contact me if you have any questions my
telephone number is 8 eight two seven six five zero nine three
my email is very simple it is deep for dashing forty nine because I love the
forty nine San Francisco's roads ROSC at lovely gmail.com so Steve forty nine
rose at gmail.com and I come available if you want to just talk sorry about
your situation everything is confidential as a lender that's the
number one thing we're like attorneys and doctors everything is confidential
about your file and about what you share with me but yes absolutely we're here
they help and we love for people to stay in their homes because that's what being
in this industry Realtors and lenders it's about everyone helping each other
and it's about helping our fellow humans not only have a comfortable home to be
in but one that they can enjoy for the rest of their lives before you go there
some kind of quote or tool or some kind of inspiration you can leave your
audience and this time especially during this time thank you so much I do
practice meds and our famiiy does em for meditation because it matters to each of
us what's inside of us and take some time for yourself
e to do some kind of exercise even if it's just walking to the refrigerator
and getting an energy bar D for being sure to eat at least a meal a day
because I know during this time some of us get so engrossed and wrapped up in so
many things we actually forget to have that basic routine of sitting down for a
meal and s which I love the most is try to get more sleep then you have been
because you've been watching Netflix but that's my corporate evening
love laugh and laugh and laugh again thank you so much Tonya Oh a pleasure
thank you for being on here with me take your meds every day that is a good one I
love it Thanks rolls five everyone thank you for
joining